Is Hong Kong Real Estate Investment Activity hot or cold?

"Is Hong Kong Real Estate Investment Activity hot or cold? | AboutHK.Com - more information about HK"

How active is the Hong Kong commercial property market? The answer depends on who you are reading at the moment. For example, The Wall Street Journal reported Hong Kong is flooded with money from the mainland China and other parts of the world, the Hong Kong attractive to investors over a period of monetary instability. " The report says that Hong Kong real estate market "may be one of the more pronounced beneficiaries of a global effort by governments to print money and stimulate lending." The Real Estate Investment is booming despite the Hong Kong government's economic forecast to shrink 6.5 percent this year, the WSJ reported. Unemployment is at a three-year high. Still, the newspaper reported, "home prices are up about 13 percent this year, while the benchmark Hang Seng Index has gained 18 percent in the same period." Using data from Jones Lang LaSalle, the WSJ called "Beijing's stimulus for bumping up sagging property prices in mainland China's four biggest cities by 15 percent between February and April of this year" as a reason for Hong Kong's strong real estate activities. "Some analysts also argue the stimulus is likely benefiting Hong Kong, where local banking deposit rates sit at historic lows, encouraging excess capital to flow into real assets like property and stocks," the newspaper reports. "Aggressive pricing by Hong Kong mortgage lenders and a limited supply of new apartments here also have helped property prices take off," the WSJ adds. But Asia Property Report, an international online property group, is apparently in a different crystal ball. With CB Richard Ellis Co. as a source, reports Asia Property Report "Institutional Investments (Hong Kong) evaporated (in the first quarter of 2009) as investors continue to find difficulty in obtaining debt and equity." Even with CB Richard Ellis data, the online newsletter "reports" The Asian market for real estate, investment, a 83 percent quarter-on-quarter decline in sales in the first quarter of 2009 with Japan, Singapore and Hong Kong suffering the biggest drop in sales . " However, smaller deals are not yet finished, the newsletter states. "The number of investment deals under $69 million (U.S.) and demand for first-hand residential housing units picked up considerably towards the end of the first quarter 2009." But new money into the market didn't primarily fuel these smaller deals, the newsletter states. "Several rounds of (Hong Kong) government interventions resulted in commercial banks gradually relaxing their requirements on property lending and lowering their mortgage rates," Property Report Asia states. Preliminary data show that Asia industrial real estate sector suffered the largest decline of the market segment, slipping 95 percent from the same quarter a year earlier, the newsletter states. Office and retail real estate transactions, followed the next return, 89 percent for office and 40 percent for retail. Singapore're experiencing a decline in investment sales in the first three months of the year with only a few isolated transactions, as potential buyers and investors prefer to remain at the margins and a" wait and see attitude, "Property Report notes Asia. Comments Please login to post comments or replies.